As the debate concerning health care reform has intensified, attention has focused on the costs of illness, particularly in the elderly. The elderly are the fastest growing segment of the population in our country and consume a disproportionate share of health care resources. This study will examine long-term factors that affect health status and the use of medical care associated with poor health and disease in the elderly. The elderly bring with them a lifetime of socioeconomic history which may be important in determining health status and the use of medical services. We study the effect of long-term factors such as family background, lifetime poverty and health insurance and occupational histories on the life cycle pattern of health status. To analyze medical care use, the proposed research considers both the direct effects of long term factors, as well as the indirect effects through their determination of current private insurance coverage, their effects on current health, and finally their effect on survival to the age at which they participated in the survey to report medical expenditures. The effects of endogenous health status on the utilization of medical services is identified by prior health habits and historical exposure to occupational health risks. The effects of current coverage by private insurance are identified by job tenure, permanent wage rate, occupation, industry and union membership in the last/longest career job from detailed work histories, and measures of these variables from the spouse's work history for married women and widows. The effects of selective survival (or selective mortality) are identified by detailed timing of events in the history of marriage and living arrangements available for individuals in the PSID and by use of national vital statistics on mortality by gender, race, age and year. The proposed study uses data obtained as part of a special health supplement to the PSID in 1990 assigned by the research team as part of the original program project data acquisition core and made available as part of the PSID public use files. The project will also use the AHEAD data from the Health and Retirement Survey.